A federal report on sex trafficking in San Diego has revealed a vast underground industry worth more than $800m annually, eight times higher than previously estimated.

The report, considered the best measure of the problem’s scope to date, has shocked researchers and law enforcement officers in the region.

“I didn’t realize the amount of money involved,” said Bill Gore, the San Diego County sheriff.

Sex trafficking, defined as the trade in which someone has been forced, coerced or tricked into prostitution, involves some 110 gangs just in San Diego County, dubbed one of 13 hot spots for child sex trafficking in the US by the Federal Bureau of Investigation.

“This is a beautiful town with an ugly truth,” said Summer Stephan, the county’s chief deputy district attorney.

The Department of Justice is set to use the report as part of a new national framework to build a more accurate picture of the murky trade across the US and develop new strategies to tackle it.

“The study will provide a lot of new information to those seeking to end modern slavery,” said John Picarelli, director of the violence and victimization research division at the National Institute of Justice, part of the justice department.

Aside from the scale of the industry, researchers were also surprised by the demographics of the exploiters involved, after their two-year, in-depth study funded by the department, which included interviews with prison inmates.

“The stereotype that sex trafficking is principally a practice of black gangs is inaccurate … and may channel law enforcement in too narrow a direction,” the report says.

Active use of social media by African American gang members make them “low hanging fruit” for the police, but that’s far from the whole picture, the report found.

‘This is a beautiful town with an ugly truth,’ says the county’s chief deputy district attorney. Photograph: Lenny Ignelzi/AP

“Pimps were evenly split between white, black and Hispanic in San Diego. And that doesn’t take into account that the rate of incarceration for black and Latino populations is disproportionately high, so most pimps, or facilitators, are probably white,” said Ami Carpenter, professor of conflict resolution at the University of San Diego and the primary author of the study.

Carpenter also found that only a tiny minority of pimps, as little as 2%, conform to the stereotypical character who uses “almost psychopathic” levels of violence.

A further 12% of exploiters that the researchers interviewed admitted to using “some physical violence” on the girls and women in their control – although up to 30% of victims interviewed said that had been the case.

But most exploiters rely on economic coercion or emotional manipulation, often accompanied by fostering a drug dependency.

Others have a more contractual partnership, under which they are hired by sex workers as their security guard or driver.

Ryan, 36, who has felony convictions for trafficking in the past and preferred not to publish his last name but goes by the alias “Eff’n McCoy”, said: “San Diego ain’t what people think it is. They see Sea World and the beach … but there are ’hoods.”

He went from a deprived childhood to pimping. “I was just following what I was seeing. You hear people rap about it and they glorify it … I thought, ‘I have to do this, sell this to get somewhere.’ But that’s not right,” he said.

In San Diego County, between 3,000 and 8,000 victims enter the clutches of the sex-trafficking industry every year, the researchers calculated. While a fifth of those come from other countries, many across the nearby border from Mexico, 80% enter the industry from within the US. The average age to begin selling sex is 15, and 50% of women arrested for prostitution have at some point been forced into it, the study found.

Crystal Isle, 41, married her cocaine dealer when she was 21. It was her second marriage. She said she was raped by her mother’s boyfriends starting when she was eight and growing up in San Diego. Now her new husband wasn’t just her drug dealer; he became her pimp and forced her to sell herself. He was imprisoned when she was 29, but by then she was entrenched in “the life”.

Once, a man paying for sex almost broke her neck. But it was only when her two-year-old son was taken away from her while she was high on methamphetamine in 2010, and she received counselling after a stint in jail, that she finally understood, at age 35, that she was a victim of exploitation.

“It was my turning point. I was full of self-hatred. I blamed myself, my mother. It was sad when I realized I’d been a victim my whole life – but it was also freeing, to the point where I don’t feel shame,” she said.

Henry Wallace, 64, said he grew up in a broken home, stealing at five while his mother turned to prostitution to raise five children after their father walked out. Then he performed as a teenage singer and enjoyed local popularity.

“It made me feel good, that power. Next thing, I was approached on the drug side and the pimping side. The girls giving me money in high school from ‘ho’ing’ on the streets. I didn’t know how to get a job. I could only speak street slang,” he said.

He would recruit girls who seemed like loners, with low self-esteem.

“They needed a father, a big brother image … I had a loving relationship with them. It was about us surviving – it wasn’t about me making you do nothing that you don’t want to do already,” he said.

His life of “Cadillacs … big homes … bling-bling” from pimping, robbery and heroin dealing ultimately led to prison, then, eventually, a weary exit from the trade.

The research found that pimps were typically earning around $670,000 a year. Their sex workers are reluctant to come forward or testify against the pimps.

Crystal Isle said: “You’re scared to get out of that life because you can’t see anything better beyond it. You need safety, counselling – and protection from people who might kill you because you’re worth hundreds of thousands of dollars to them.”

Carpenter said the main roots of sex trafficking were in poverty and racism. But her research also revealed that the trade spans the economic scale, ranging from an individual exploiter in a poor neighborhood up to “black book rings”, “where judges, lawyers and generals, elite persons in society, are provided access to women and children, whoever they want”, she said.

The study found the underground industry was shifting from drug trafficking to sex trafficking because of lower risk of detection.

And in the last five to seven years, the authorities in San Diego have changed the way they deal with the flourishing sex trade, Stephan, the chief deputy district attorney, said.

Educators, health and child welfare workers, police, prosecutors and victims’ advocates began collaborating to help girls and women avoid or escape exploitation.

“We want[ed] to go after the organized crime, address kids at high risk, especially who are homeless or in foster care – have a proactive prevention and detection model in our schools,” said Stephan.

But they still lacked key information on the nature and extent of the trade.

Carpenter said the county had “anecdotes but no numbers”, which her research sought to address.

“The study provides answers to important questions – how traffickers come into being, how they learn and operate, and how different interventions might deter them in the future,” said the justice department’s Picarelli.

San Diego is now pushing for change.

Stephan argued recently in the state capitol for new laws allowing heavier punishments for exploiters and men paying for sex in California. She wants automatic jail time, re-education programs and bigger fines for so-called johns, with penalty money diverted to services helping women leave prostitution.

San Diego County is not decriminalizing sex work, but there is a growing recognition of the victims of trafficking.

Isle has seen both sides. She believes the statistics in the new report about the scale of trafficking are conservative.

After years of violence and danger, she began studying in 2011 and in January 2016 joined Point Loma Nazarene University, on a scholarship for victims of trafficking. She called for better understanding of the trade.

“People deserve the opportunity to change and they don’t need you over there looking at them like they’re trash,” she said.

Isle is scoring A’s in her studies.

She choked up.

“I’m so proud. I’ve realized I’m really good at this school thing and I might have some value to some organization one day,” she said.